Coordination of power network operators as a game-theoretical problem

Martin Palovic

No 40, Bremen Energy Working Papers from Bremen Energy Research

Abstract: We analyse incentive problems in coordination of network operators that purchase services for electricity networks from distributed resources. Such services are often associated with externalities that make the social optimum costly against the individual one. However, a costly reaction of other operators occurs when the social optimum is missed. Regular network situations result in game-theoretical problems like prisoner’s dilemma or chicken that are played in a random order in an infinitely repeated game. The outcome of this complex game-theoretical setting, i.e. adopted strategies, is difficult to predict. Adjustments to network regulation aiming to internalize external effects are discussed as a remedy.

Keywords: network operator coordination; game theory; network regulation (search for similar items in EconPapers)
JEL-codes: D42 K23 L51 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2022-10
New Economics Papers: this item is included in nep-ene, nep-gth and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bei:00bewp:0040

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